Fifty hospitals in the United States are charging uninsured consumers more than 10 times the actual cost of patient care, according to research published Monday.

All but one of the facilities are owned by for-profit entities and the largest number of hospitals — 20 — are in Florida. For the most part, researchers said, the hospitals with the highest markups are not in pricey neighborhoods or big cities, where the market might explain the higher prices.

Topping the list is North Okaloosa Medical Center, a 110-bed facility in the Florida Panhandle about an hour outside of Pensacola. Uninsured patients are charged 12.6 times the actual cost of patient care.

Community Health Systems operates 25 of the hospitals on the list. Hospital Corporation of America operates 14 others.

“They are price-gouging because they can,” said Gerard Anderson, a professor at the Johns Hopkins Bloomberg School of Public Health, co-author of the study in Health Affairs. “They are marking up the prices because no one is telling them they can’t.”

He added: “These are the hospitals that have the highest markup of all 5,000 hospitals in the United States. This means when it costs the hospital $100, they are going to charge you, on average, $1,000.”

The researchers said other consumers who could face those high charges are patients whose hospitals are not in their insurance company’s preferred network of providers, patients using workers’ compensation and those covered by automobile insurance policies.

Carepoint Health-Bayonne Med­ical Center in Bayonne, N.J., for example, also charges rates 12.6 times the actual cost of patient care. State law limits the maximum that hospitals can charge uninsured patients to 115 percent, a spokesman said.

By comparison, the researchers said, a typical U.S. hospital charges 3.4 times the cost of patient care.

Officials representing the 50 hospitals disputed the findings, saying that they provide significant discounts to uninsured and underinsured patients.

Understanding hospital pricing and charges is one of the most frustrating experiences for consumers and health-care professionals. It is virtually impossible to find out ahead of time from the hospital how much a procedure or stay is going to cost. Once the bill arrives, many consumers have difficulty deciphering it.

Most hospital patients covered by private or government insurance don’t pay full price because insurers and programs such as Medicare negotiate lower rates for their patients. But millions of Americans who don’t have insurance don’t have anyone to negotiate for them. They are most likely to be charged full price. As a result, uninsured patients, who are often the most vulnerable, face skyrocketing medical bills that can lead to personal bankruptcy, damaged credit scores or avoidance of needed medical care.

Researchers said the main factors leading to overcharging are the lack of market competition and the fact that the federal government does not regulate prices that health-care providers can charge. Only two states, Maryland and West Virginia, set hospital rates.

In the United States, hospitals have the chargemaster, a lengthy list of the hospital’s prices for every procedure performed and for every item used during those procedures, such as the cost of one Tylenol tablet or a box of gauze.

To determine the size of markups, researchers used what Medicare allows for the costs of care. That includes direct patient costs, such as emergency-room care, and indirect costs such as administration. It does not include private doctors’ costs.

Using data for all Medicare-certified hospitals between May 2012 and April 30, 2013, researchers tallied up total charges, then divided them by the patient care costs, which they defined as total costs Medicare agrees to pay.

“For-profit players appear to be better players in this price-gouging game,” said Ge Bai, an assistant accounting professor at Washington and Lee University and a study co-author.

Carepoint Health, which owns the Bayonne hospital and two others in Hudson County, N.J., said charge-pricing affects less than 7 percent of its total patient interactions. Without it or adequate reimbursements, “our safety-net hospitals risk closure,” a spokesman said. Urban hospitals receive lower reimbursements than suburban ones, a spokesman said.

Officials at Community Health Systems of Franklin, Tenn. and Hospital Corporation of America, based in Nashville, said hospital charges rarely reflect what consumers actually pay. They said their hospitals offer significant discounts to uninsured patients and charity care for those who qualify. Community Health Systems said in a statement that it provided $3.3 billion in charity care, discounts and other uncompensated care for consumers last year. It also noted that several of its hospitals were not owned by CHS at the time the data were reported.

HCA said in a statement that its uninsured patients are eligible for free care through its charity care program or they receive discounts that are similar to discounts that patients covered by a private insurance plan receive.

The Federation of American Hospitals, which represents for-profit hospitals, said the listed hospitals provided nearly $450 million in uncompensated care in 2012 alone. Including the discounts “would have had a significant effect on the charge-to-cost-ratio reported, and therefore the implications of the study’s results,” it said in a statement.

It makes little economic sense to “mark something up 10 times what it actually costs and then give a discount,” Anderson said. “Clearly they expect someone to pay these inflated prices.”

He noted that the cost of workers’ compensation and auto insurance polices are higher in the states where hospital charges are unregulated because companies have to pay the higher rates.

Lena H. Sun is a national reporter for The Washington Post, focusing on health.

A new bipartisan committee’s working group will gather on Capitol Hill throughout the coming months to find ways to improve electronic health records, according to Senate health committee chairman Lamar Alexander (R-Tenn.) and ranking member Patty Murray (D-Wash.).

The group will work to find five or six ways to “make the failed promise of electronic health records something that physicians and providers look forward to instead of something they endure,” Murray said in an announcement.

All members of the Senate health committee are invited to be a part of the working group. Staff meetings begin this week, with participation from health IT professionals, industry experts and government agencies.

The working group’s goals include the following:

Help providers improve quality of care and patient safety.

Facilitate interoperability between EHR vendors.

Empower patients to engage in their own care through access to their health data.

Protect privacy and security of health information.

The working group isn’t the only way Alexander and Murray are pushing for change when it comes to EHRs.

Most hospitals don’t have good ways of measuring the complex costs associated with an individual patient’s stay in the hospital. The VA is one surprising exception.

The success of health reform in the US depends on finding ways to control the growth of costs. Hospital care is expensive. And when patients have to be readmitted unexpectedly after discharge, it can really crank up spending.

As we strive to keep health care costs in line, reducing hospital readmissions is drawing a lot of attention. Reducing preventable readmissions could reduce health care spending and improve quality of care at the same time.

But very little research on readmission costs has been done. An exception is a study that found that one in five elderly Medicare patients is readmitted to the hospital within 30 days of being discharged, at an estimated cost of $17.4 billion in 2004.

Most hospitals don’t have good ways of measuring the complex costs associated with an individual patient’s stay in the hospital.

But there is, however, a hospital system that does a very good of job of tracking these costs: the Veterans Health Administration.

Veterans Affairs could provide a blueprint

The Veterans Health Administration (the VA) operates 119 acute care hospitals across the US, and has created an unparalleled comprehensive patient-cost accounting system, its Decision Support System (DSS).

The DSS works from the bottom up by summing the individual resources and costs each individual patients winds up needing during their hospital stay. Unlike most other hospital accounting systems, the VADSS also can separate costs that are fixed regardless of the volume of services provided, such as administrative overhead, from costs that vary with service volume, such as lab tests or imaging. All of this means that the VA can track patients’ costs with greater precision than most hospitals, and can more easily see the cost of readmissions.

There are other reasons why VA is a good setting for studying readmission costs. VA hospitals have a simpler set of incentives around readmitting patients. Under Medicare, hospitals face a trade-off between receiving payments for readmitting Medicare patients and avoiding payment penalties for not readmitting patients under the new ACA regulations.

But in the VA system, budgets are set annually, so there is no financial incentive to readmit patients. It will not increase the amount of money VA hospitals get. And physicians who work in VA hospitals are salaried VA employees. They do not gain financially when they readmit patients, so they have no incentive to provide unnecessary care.

How much money does preventing readmission save?

In a recent study, Theodore Stefos and I used 2011 Decision Support System data to examine the component of cost that varies with a readmission, to provide hospital managers with a more realistic estimate of how much they could save by reducing readmissions.

We found that managers could expect to save $2,140 for the average 30-day readmission prevented. For heart attack, heart failure, and pneumonia patients, expected readmission cost estimates were higher: $3,432, $2,488 and $2,278 respectively.

We also found that patients’ risk of illness was the main driver of expected readmission cost. This is an important finding for managers. Even though this is a factor they cannot control, they can expect that patients with a greater risk of illness might be at greater risk after controlling for other factors such as age. Men also were much more likely to be readmitted than women, as were lower income and unmarried vets. Understanding this information can help hospital managers better predict which patients are at risk for readmission, and to take steps to address this proactively.

While the VA has some processes of care that differ from other health care systems, its experience has important lessons for private sector hospitals, especially for those that treat a high share of chronically ill or low-income patients.

Why it is important to know what readmissions cost

Today hospitals are under increasing pressure to curb readmissions. For instance in 2013 Centers for Medicare & Medicaid Services (CMS) started to financially penalize hospitals for 30-day readmissions that exceed national averages for heart attack, heart failure and pneumonia. As of October 2014, chronic obstructive pulmonary disorder and elective knee and hip replacements are also being targeted and the penalty has increased up to 3% of the total Medicare reimbursement to the hospital.

Hospital managers would like to know what actual cost savings are when a readmission is avoided, so they can understand how readmissions affect their overall budgets.

The Centers for Medicare & Medicaid Services has paid out nearly $30 billion in meaningful use incentives for hospitals and physicians to adopt EHRs. But some members of Congress, the body that approved those funds, are about as frustrated with EHRs as doctors and nurses.

“The evidence suggests these goals haven’t been reached,” said Senator Lamar Alexander, R-Tennessee, in a long EHR hearing followed by Erin McCann, Healthcare IT News managing editor.

Robert Wergin, MD, president of the American Academy of Family Physicians, said that family physicians are having a difficult time with the Stage 2 meaningful use requirements. The “time, expense and effort it takes makes it not worth while,” said Wergin. Indeed, some 55 percent of physicians surveyed plan on skipping Stage 2 all together.

“The issue of interoperability between electronic health records represents one of the most complex challenges facing the healthcare community,” said Wergin. The government “must step up efforts to require interoperability.”

A central problem, as McCann wrote, is that “Vendors have no incentive to share data and create more interoperable systems. There’s the question of data ownership here. There’s the question of competition. And there’s the question of standards, or lack thereof.”

“The vendors are siloed,” as Wergin said. “And you’re held somewhat hostage by the vendor you have.”

PricewaterhouseCoopers with General Dynamics Information Technology, DSS Inc. and Medsphere; and

IBM and Epic Systems.

DOD is expected to award one of those teams – consisting of commercial vendors coupled with EHR developers – with the contract in June 2015.

While it’s too early to know whether there’s a frontrunner, IBM and Epic have arguably been the most proactive team. They were the first to announce their partnership in June 2014. Around the same time, IBM began hiring high-profile personnel to lead its health care efforts, including Dr. Keith Salzman, who spent 20 years with DOD’s military health system.

On Wednesday, IBM and Epic raised the bar in their bidding strategy, announcing the formation of an advisory group of leading experts in large, successful EHR integrations to advise the companies on how to manage the overhaul — if they should win the contract, of course.

The advisory group’s creation was included as part of IBM and Epic’s bid package, according to Andy Maner, managing partner for IBM’s federal practice.

In a press briefing at IBM’s Washington, D.C., offices, Maner emphasized the importance of soliciting advice and insight from the group. Members of the advisory board include health care organizations, such as the American Medical Informatics Association, Duke University Health System and School of Medicine, Mercy Health, Sentara Healthcare and the Yale-New Haven Hospital.

The board will advise on more than tech hurdles.

The advisory board also includes veterans who’ve dealt firsthand with challenging circumstances under DOD’s current system, which serves 10 million beneficiaries.

The lack of interoperability, particularly with off-network health care providers and the Department of Veterans Affairs’ own health records system, can put soldiers and transitioning veterans through unnecessary grief.

“I’m not trashing the current system, but you’re constantly getting referred out,” said retired Maj. William Lyles, who was wounded by an improved explosive device while serving as an Army Green Beret. “I want to add the patient’s perspective to this group.”

However, Epic, one of the largest players in the broader EHR market, has not been immune from criticism its own systems don’t interconnect well with competing systems.

A front-page New York Timesstory last fall reported the company had been criticized in some circles “by those who say its empire has been built with towering walls, deliberately built not to share patient information with competing systems.”

The IBM-Epic advisory board has already shared input and will continue to do so should the team capture the award.

As the due date on the contract award nears, Nextgov plans to check in with all the bidders on the contract.

“Tonight, I’m launching a new Precision Medicine Initiative to bring us closer to curing diseases like cancer and diabetes — and to give all of us access to the personalized information we need to keep ourselves and our families healthier.”

— President Barack Obama, State of the Union Address, January 20, 2015

President Obama has long expressed a strong conviction that science offers great potential for improving health. Now, the President has announced a research initiative that aims to accelerate progress toward a new era of precision medicine (www.whitehouse.gov/precisionmedicine). We believe that the time is right for this visionary initiative, and the National Institutes of Health (NIH) and other partners will work to achieve this vision.

The concept of precision medicine — prevention and treatment strategies that take individual variability into account — is not new1; blood typing, for instance, has been used to guide blood transfusions for more than a century. But the prospect of applying this concept broadly has been dramatically improved by the recent development of large-scale biologic databases (such as the human genome sequence), powerful methods for characterizing patients (such as proteomics, metabolomics, genomics, diverse cellular assays, and even mobile health technology), and computational tools for analyzing large sets of data. What is needed now is a broad research program to encourage creative approaches to precision medicine, test them rigorously, and ultimately use them to build the evidence base needed to guide clinical practice.

The proposed initiative has two main components: a near-term focus on cancers and a longer-term aim to generate knowledge applicable to the whole range of health and disease. Both components are now within our reach because of advances in basic research, including molecular biology, genomics, and bioinformatics. Furthermore, the initiative taps into converging trends of increased connectivity, through social media and mobile devices, and Americans’ growing desire to be active partners in medical research.

Oncology is the clear choice for enhancing the near-term impact of precision medicine. Cancers are common diseases; in the aggregate, they are among the leading causes of death nationally and worldwide, and their incidence is increasing as the population ages. They are also especially feared, because of their lethality, their symptoms, and the often toxic or disfiguring therapies used to treat them. Research has already revealed many of the molecular lesions that drive cancers, showing that each cancer has its own genomic signature, with some tumor-specific features and some features common to multiple types. Although cancers are largely a consequence of accumulating genomic damage during life, inherited genetic variations contribute to cancer risk, sometimes profoundly. This new understanding of oncogenic mechanisms has begun to influence risk assessment, diagnostic categories, and therapeutic strategies, with increasing use of drugs and antibodies designed to counter the influence of specific molecular drivers. Many targeted therapies have been (and are being) developed, and several have been shown to confer benefits, some of them spectacular.2 In addition, novel immunologic approaches have recently produced some profound responses, with signs that molecular signatures may be strong predictors of benefit.3

These features make efforts to improve the ways we anticipate, prevent, diagnose, and treat cancers both urgent and promising. Realizing that promise, however, will require the many different efforts reflected in the President’s initiative. To achieve a deeper understanding of cancers and discover additional tools for molecular diagnosis, we will need to analyze many more cancer genomes. To hasten the adoption of new therapies, we will need more clinical trials with novel designs4 conducted in adult and pediatric patients and more reliable models for preclinical testing. We will also need to build a “cancer knowledge network” to store the resulting molecular and medical data in digital form and to deliver them, in comprehensible ways, to scientists, health care workers, and patients.

The cancer-focused component of this initiative will be designed to address some of the obstacles that have already been encountered in “precision oncology”: unexplained drug resistance, genomic heterogeneity of tumors, insufficient means for monitoring responses and tumor recurrence, and limited knowledge about the use of drug combinations.

Precision medicine’s more individualized, molecular approach to cancer will enrich and modify, but not replace, the successful staples of oncology — prevention, diagnostics, some screening methods, and effective treatments — while providing a strong framework for accelerating the adoption of precision medicine in other spheres. The most obvious of those spheres are inherited genetic disorders and infectious diseases, but there is promise for many other diseases and environmental responses.

The initiative’s second component entails pursuing research advances that will enable better assessment of disease risk, understanding of disease mechanisms, and prediction of optimal therapy for many more diseases, with the goal of expanding the benefits of precision medicine into myriad aspects of health and health care.

The initiative will encourage and support the next generation of scientists to develop creative new approaches for detecting, measuring, and analyzing a wide range of biomedical information — including molecular, genomic, cellular, clinical, behavioral, physiological, and environmental parameters. Many possibilities for future applications spring to mind: today’s blood counts might be replaced by a census of hundreds of distinct types of immune cells; data from mobile devices might provide real-time monitoring of glucose, blood pressure, and cardiac rhythm; genotyping might reveal particular genetic variants that confer protection against specific diseases; fecal sampling might identify patterns of gut microbes that contribute to obesity; or blood tests might detect circulating tumor cells or tumor DNA that permit early detection of cancer or its recurrence.

Such innovations will first need to be tested in pilot studies. We will initially want to take advantage of the rare settings where it is already possible to collect rich information through clinical trials, electronic medical records, and other means.

Ultimately, we will need to evaluate the most promising approaches in much larger numbers of people over longer periods. Toward this end, we envisage assembling over time a longitudinal “cohort” of 1 million or more Americans who have volunteered to participate in research. Participants will be asked to give consent for extensive characterization of biologic specimens (cell populations, proteins, metabolites, RNA, and DNA — including whole-genome sequencing, when costs permit) and behavioral data, all linked to their electronic health records. Qualified researchers from many organizations will, with appropriate protection of patient confidentiality, have access to the cohort’s data, so that the world’s brightest scientific and clinical minds can contribute insights and analysis. These data will also enable observational studies of drugs and devices and potentially prompt more rigorous interventional studies that address specific questions.

Such a varied array of research activities will propel our understanding of diseases — their origins and mechanisms, and opportunities for prevention and treatment — laying a firm, broad foundation for precision medicine. It will also pioneer new models for doing science that emphasize engaged participants and open, responsible data sharing. Moreover, the participants themselves will be able to access their health information and information about research that uses their data.

The research cohort will be assembled in part from some existing cohort studies (many funded by the NIH) that have already collected or are well positioned to collect data from participants willing to be involved in the new initiative. Creating this resource will require extensive planning to achieve the appropriate balance of participants, develop new approaches to participation and consent, and forge strong partnerships among existing cohorts, patient groups, and the private sector. It will also be crucial to carefully examine the successes and shortfalls of other longitudinal cohort studies.

Achieving the goals of precision medicine will also require advancing the nation’s regulatory frameworks. To unleash the power of people to participate in research in innovative ways, the NIH is working with the Department of Health and Human Services to bring the Common Rule, a decades-old rule originally designed to protect research participants,5 more in line with participants’ desire to be active partners in modern science. To help speed the translation of such discoveries, the Food and Drug Administration is working with the scientific community to make sure its oversight of genomic technology supports innovation, while ensuring that the public can be confident that the technology is safe and effective.

Although the precision medicine initiative will probably yield its greatest benefits years down the road, there should be some notable near-term successes. In addition to the results of the cancer studies described above, studies of a large research cohort exposed to many kinds of therapies may provide early insights into pharmacogenomics — enabling the provision of the right drug at the right dose to the right patient. Opportunities to identify persons with rare loss-of-function mutations that protect against common diseases may point to attractive drug targets for broad patient populations. And observations of beneficial use of mobile health technologies may improve strategies for preventing and managing chronic diseases.

Ambitious projects like this one cannot be planned entirely in advance; they should evolve in response to scientific and medical findings. Much of the necessary methodology remains to be invented and will require the creative and energetic involvement of biologists, physicians, technology developers, data scientists, patient groups, and others. The efforts should ideally extend beyond our borders, through collaborations with related projects around the world. Worldwide interest in the initiative’s goals should motivate and attract visionary scientists from many disciplines.

This initiative will also require new resources; these should not compete with support of existing programs, especially in a difficult fiscal climate. With sufficient resources and a strong, sustained commitment of time, energy, and ingenuity from the scientific, medical, and patient communities, the full potential of precision medicine can ultimately be realized to give everyone the best chance at good health.